CHAPTER 1

CONCEPTS AND PRINCIPLES CHARACTERISTICS AND

SIGNIFICANCE OF HUMAN RESOURCE
INTRODUCTION -
• Greatest accomplishment/ achievement of the twentieth
century is an ‘ORGANISATION’. Organisations play a central role
in our lives. ‘Organisations’ are the most inventive social
arrangements of our age and of civilisation.
• It is a marvel to know that tens of thousands of people with
highly individualised backgrounds, skill and interests are co-
ordinated in various enterprises to pursue common
institutionalised goals.
• Organisation run on Man, Material, Money, Machine and
Methods.
• Organisation become more productive through the effective
and efficient use of one resource i.e. PEOPLE
 WHAT IS AN ORGANISATION
ORGANISATION

PEOPLE COLLECTIVE ACTION OTHER

RESOURCES

CO-ORDINATED SYSTEMS AND

TEAM WORK PROCEDURES
EFFORTS

STANDARDS,
DISCIPLINE OF DISCIPLINE, RULES
INTEGRATION
WORKING AND TIME AND REGULATIONS
• People are the common element in every
organisation. They create the innovations for which
organisations are noted. Viewed from the
perspective of an organisation, people are
resources, i.e. Human Resource.
• As a slogan at one union carbide plant puts it,
“Assets make things possible, people make things
happen”. It is people who produce a nation’s
valued products and services.
• Meeting the goal of an organisation is not enough but one should
achieve the optimum result with the quality.
• Any organisation needs committed and competent people to utilise
the resources at maximum
• Dynamic people can build dynamic organisation
• Productivity is through people
What is HRM?

• Management of Human Resources is a Human Resource

Management
• Definition - HRM is a continuous process to ensure the
development of employee competencies, dynamism,
motivation and effectiveness in a systematic and planned
way.

• Multiple goals of HRM

- Employee competency development
- Employee motivation development
- Organisation climate development
Three Dimensions of HRM

SYSTEM (of
organisation)

COMPETENCY
(by training, goal CULTURE (of
setting by Authority)
M.B.O.,
creativity)
Differentiate between HRM and
Personnel Management
• IR – Industrial Relation – Peace
• PM – Personnel Management – Stability
• HRD – Human Resource Development - Growth

IR

HRM
HRD PM
Distinguish between
Personnel Management (PM) Human Resource Management
(HRM)
PM is a phase of management HRM is a field of study embodying
which deals with the effective behavioural science knowledge
control and use of manpower. relating to the working of line and
staff officials and union leaders to
motivate to achieve organizational
goals.
PM focuses only on personnel HRM is a broad concept which
aspects such as leadership, justice covers many aspects of PM and
determination, task specialisation, include social, professional and
staffing, performance appraisal, individual enterprise aspects.
etc.
PM is a narrower term HRM is growth oriented i.e. growth
of an organisation vis-à-vis growth
of employees and society.
Stereo types of Personnel Management and HRM
(Source: “Human Resource Management and Industrial Relations” by Guest – Journal of
Management Studies, 1987, 24 (5))

Dimensions Personnel Human Resource

Management Management
Time and Planning Short-term, ad-hoc Long-term, proactive
perspective
Psychological contract Compliance Commitment
Control Systems External Control Self-Control
Employee relation Pluralist, collective, Individual, developed
perspective Low-Trust
Preferred Roles Bureaucratic, formal, Organically
defined roles developed, flexible
roles
Evaluation Criteria Cost-minimisation Maximum utilization
(Human Asset
Accounting)
Old PM v/s. New Model of HRM
[Link]. Old Model New Model
1 Individual Position/ Job as basic Team as basic unit
unit of organisation
2 Relations with environment Densely networked with environment
handled by
3 Vertical flows of information Horizontal and vertical flow of
information
4 Tall (Many layers of Management) Flat (few layers of Management)
5 Emphasis on structures Emphasis on process
6 Career paths upwards/ linear Career paths flexible/ lateral
7 Standardized evaluation and reward Customised evaluation and reward
systems system
8 Ethnocentric International
9 Single strong culture with strong Diversity of view points and behaviour
expectations of behaviour
Source: Adapted from Ancoria [Link].; “The New Organisation”, 1996
•The purpose of HRM
The purpose of HRM is to improve the productive contribution of people
to the organisation
The purpose of HRM is to enable appropriate deployment of human
resources for improving productivity and functional efficiency.

•Objectives of HRM
Objectives are the benchmark against which actions are evaluated.
Objectives guide the human resources function in practice. And such
objectives are:
a. Societal objectives
b. Organisational objectives
c. Functional objectives
d. Personal objectives
MANAGEMENT OBJECTIVES SUPPORTING OBJECTIVES
1. Societal Objectives 1. Legal Compliance
2. Required Services
3. Union-Management Relation
2. Organisational Objectives 1. Human Resource Planning
2. Required services
3. Selection
4. Training and Development
5. Appraisal
6. Placement
7. Control Activities
3. Functional Objectives 1. Appraisal
2. Placement
3. Control Activities
4. Personal Objectives 1. Training and Development
2. Appraisal
3. Placement
4. Compensation
5. Control Activities
The HR activities :

• To achieve its purpose and objectives, the Human resource

department obtains, develops, utilizes, evaluates, maintains and
retains the right numbers and types of workers to provide the
organisation with an appropriate work force.
i.e. RIGHT MEN AT RIGHT TIME
Responsibility for HR activities-
• It primarily lies with HR department but every line manager is
responsible. Individual managers remain involved with planning,
selection, orientation, training, development, evaluation,
compensation and other peronnel activities.
 The organisation of a HR Department
CEO/ Chairman of Board

Executive Directors Non-Executive Directors

Vice-Presidents

Finance Sales/ Production Commercial

HR & ADMN. Legal and PR
Marketing
GMs

Personnel HRD IR Personnel Time Office Administration

Management Administration
Managers & Officers
Managers & Officers
Canteen Medical Safety
Record
HRP Recruitment Welfare HR-SAP
Committees keeping
and selection
Managers & Officers

Training and Competency Performance

Development Mapping Management